How Ukraine copes with gas shutoff

How Ukraine copes with gas shutoff

January 07 at 19:22 | Reuters
Russia cut gas supplies for Ukraine on New Year's Day over a dispute about 2009 gas prices and unpaid debts. The following is a factbox on how Ukraine is coping with the gas cut-off during freezing temperatures that have fallen in Kiev to minus 20 degrees Celsius (minus 5 F):

DOMESTIC CONSUMPTION:

Ukraine currently consumes about 260 million cubic metres (mcm) a day, of which 200 mcm/day comes from reserves and 60 mcm/day comes from domestic gas production.

Ukraine's Energy Ministry said Ukraine consumed 59.3 billion cubic metres (bcm) of gas in 2008, plus about 7 bcm of "technical" gas to keep the transit pipeline system working.

In 2008, Ukraine imported 47.9 bcm from Russia at a cost of $8.61 bln.

RESERVES:

Ukraine's state energy company Naftogaz says it has 16.5 billion cubic metres of gas in reserves. That could last Ukraine over two months, based on average consumption rates.

HOUSEHOLDS:

Households so far have not been affected by the Russian gas cut-off. Naftogaz said heating should not be affected by the dispute.

Heating in towns and cities in Ukraine is carried out by central heating utilities which pipe hot water into homes and flats. In villages, many Ukrainians still use wood and coal to heat their homes during the freezing winter months.

In December, some local utilities in Ukraine briefly had their gas cut because they had failed to pay their bills, leading to heating problems for some households.

INDUSTRY:

Ukraine's government said on Jan. 6 it had ordered some regional utilities to start using fuel oil instead of gas. It said the government would soon start importing fuel oil, though it has so far given no idea of how much it would seek to import.

"Regions have been ordered ... to take necessary measures to prepare and move all heat generation companies to work on reserve fuel -- fuel oil," the government said.

"A government decision is being prepared which will cover the purchase of necessary fuel oil volumes abroad," it said.

Naftogaz Chief Oleh Dubyna said some metals and chemical companies may have to have their gas supplies cut.

That could hit Ukraine's economy hard as metals and chemical companies make up more than half the country's exports, though an economic crisis and sinking world demand has already cut industrial gas consumption.

POLITICS:

President Viktor Yushchenko has called on Russia to restart gas transit supplies to Europe but has made few public comments on the dispute.

Some Ukrainians have blamed their politicians for failing to reach agreement with Russia.

That could be a problem as Yushchenko and Prime Minister Yulia Tymoshenko gear up for presidential elections in the next 12 months. But analysts say that whoever manages to reach a deal with Russia over gas would gain popularity. (Reporting by Guy Faulconbridge, Sabina Zawadzki and Pavel Polityuk in Kiev; editing by Michael Roddy)